Scleroderma is a connective tissue disease of unknown etiology characterized by excessive fibrosis of the skin and visceral organs. Scleroderma patients have not responded to traditional immunosuppressive and anti-inflammatory regimens, and the majority of these patients experience progressive disease with marked morbidity and mortality. Chronic graft versus host disease that occurs in bone marrow transplant patients shares many characteristics with scleroderma. In addition, recent reports have suggested that maternal-fetal exchange of cells across placental membranes and persistent microchimerism may contribute to scleroderma pathogenesis. The drug thalidomide, previously known for its teratogenic effects in the early 1960's, has since been found to have anti-inflammatory and immune-modulating effects in a number of immune mediated diseases, including graft-versus-host disease. Furthermore, preliminary studies suggest that the conventional treatment of graft-versus-host disease, cyclosporin A, may be effective in treating scleroderma. Thalidomide use has not been reported in scleroderma patients. This pilot study will obtain preliminary data on the safety and tolerability of thalidomide in scleroderma patients by establishing baseline clinical and serological profiles of patients and then follow those parameters during daily exposure to thalidomide over an initial dose escalation course over 12 weeks, with continued maintenance therapy for up to one year.